In this post, I will explain to you what exactly Litecoin is, why you should care about it, and some facts and numbers.
What is Litecoin?
Litecoin was originally conceived and developed by Charlie Lee in the year 2011. Its goal was to be the “silver” coin to bitcoin’s gold, however, it soon became a direct competitor due to the similar technology. However, “similar” does not mean “the same”. Therefore Litecoin has some disadvantages and some advantages in comparison to BTC. For example, the transaction time in litecoin is much faster than that of Bitcoin, on the other hand, the blockchain is also much larger.
Charlie Lee was at first a former Google engineer, and he launched litecoin thinking in the long-term. He believed that this cryptocurrency would be a solution for traders, developers, and merchants to carry out transactions. In fact, it continues to play an important role in these aspects and it is continuously improving. That is why we believe it is one of the greatest cryptocurrencies out there continuing to grow hand-in-hand with bitcoin.
What are the uses of Litecoin?
This cryptocurrency is just like BTC, it is a peer-to-peer digital currency that enables instant transactions with negligible costs. These costs are of only 1/1000 of a cent, which is nothing compared to what banks charge. This has the positive effect that transactions between users are encouraged, which gives the economy a small but noticeable boost.
Therefore, Litecoin is proven to be a currency that is very suitable for being used in e-commerce, just like bitcoin. It helps to control your own finances without having to worry about intermediaries, which will soon or later take some of your money. It has a faster transaction time than most cryptocurrencies and it has an improved storage efficiency. This is thanks to the “s-crypt” (Scrypt) which is similar in many ways to the one used by BTC’s network.
It is interesting to observe that although there are so many cryptocurrencies out there, most of them don’t compete with each other directly. Aside from Litecoin and Bitcoin, another interesting example is ethereum.
At the moment, the market cap of Litecoin is around 1.5 billion dollars, which is fairly little in contrast to the 90 billion dollars that make up the whole cryptocurrency market cap. Although this may seem low, Litecoin is still one of the largest cryptocurrencies by market cap out there. Since Litecoin is still quite unknown for the average investor, it may prove to be a brilliant long-term investment.
The daily volume is an important concept to have in mind when making an investment. If many users buy it, then the price will rise. If many users sell it, the price will decrease. LTC’s daily volume is around 500 million dollars which is one of the highest figures on the crypto market. This makes its trading easier and gives it a high liquidity.
Transaction differences with BTC
- Litecoin can handle a higher volume than BTC due to its faster block generation. This is helpful for the future because if there are many users making transactions at the same time then fast transactions are crucial.
- A disadvantage to this, however, is that because it generates many more blocks, litecoin’s blockchain becomes much larger.
- Since the block time is quicker than that of BTC’s, this reduces the probability of a double-spending attack.
- A merchant waiting for a block time has to wait on average 4 times less for litecoin than for bitcoin.
- The block reward is the same as it first started (50 LTC). On the other hand, BTC’s current reward has fallen from 50 BTC to 12.5 BTC.
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And as always…
Cryptocurrencies are the near future and I believe it will change the world as we know it. Start learning with me and the rest of the CoinNoob community!